U.S. Trade Representative Katherine Tai on June 2 announced plans to increase tariffs by 25 percent on 26 items from India, but said the increases would be suspended until December.

India imposed a 2% tax from April last year on the income in the country of foreign tech and e-commerce companies like Amazon, Facebook and Google. The administration of former President Donald Trump opposed it and Biden took over.

The trade representative’s office said, “India’s daylight saving time is unreasonable or discriminatory and hinders or restricts US commerce.”

The Bureau estimated that the increase in taxes on selected imports from India will be equal to the taxes India imposes on US companies under DST.

“Estimates indicate that the value of DST payable by US-based business groups to India will be around $ 55 million per year. The level of trade covered by the action takes into account five estimates of the amount of customs duties to be collected on goods from India and estimates of the amount of taxes assessed by India. “

Other items threatened with increased tariffs include bamboo, shutters, cigarette papers, beads, copper foil, and bedroom furniture.

Inaugurating the new phase of trade wars, the Biden administration also threatened to raise tariffs on imports from five other countries – the UK, Austria, Italy, Spain and Turkey on their DST.

Explaining the reason for the suspension of increases for the six countries, Tai said it was to help international tax negotiations.

“The United States remains committed to achieving consensus on international tax issues through the OECD (Organization for Economic Co-operation and Development) and G20 processes. Today’s actions allow time for these negotiations to continue moving forward while retaining the ability to impose tariffs.

In the first phase of negotiations, finance ministers from the G7, the main Western industrial powers, meeting in London, agreed on Saturday on a minimum corporate tax rate of 15% to prevent companies from using loopholes to avoid paying income taxes in the countries where they operate.

The deal will then go to next month’s meeting in Italy of the G20 – a group of 19 countries, industrialized and developing, and the European Union.

India is a member of the G20.

Biden’s latest salvo opens a new front in the trade war between the two countries that began in 2018 when Trump imposed 25% tariffs on steel and aluminum imports from India.

In 2019, Trump withdrew special treatment for some Indian exports, mostly low-tech items and handicrafts, under the General System of Preferences (GSP) which exempted them from import duties.

New Delhi retaliated by imposing higher tariffs on 28 American products, including nuts and almonds.

Biden has yet to take action to restore the GSP facility for India.

(Arul Louis can be contacted at [email protected] and follow @aruluis)

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